Oregon state income tax#
This notebook shows how Oregon’s state income tax, including credits, operates holistically.
Examples#
from policyengine_us import IndividualSim
import pandas as pd
import plotly.express as px
LIGHT_GRAY = "#F5F5F5"
GRAY = "#BDBDBD"
BLUE = "#5091cc"
LIGHT_BLUE = "lightblue"
DARK_BLUE = "darkblue"
def make_tax(adults, children):
sim = IndividualSim(year=2022)
sim.add_person(name="head", age=25)
members = ["head"]
if adults == 2:
sim.add_person(name="spouse", age=25)
members += ["spouse"]
for i in range(children):
child = "child{}".format(i)
sim.add_person(name=child, age=6)
members += [child]
sim.add_tax_unit(name="tax_unit", members=members, premium_tax_credit=0)
sim.add_household(name="household", members=members, state_code="OR")
sim.vary("employment_income", max=300_000, step=100)
employment_income = sim.calc("employment_income")[0]
state_income_tax = sim.calc("state_income_tax")[0].round()
mtr = sim.deriv("state_income_tax", "employment_income", wrt_target="head")
return pd.DataFrame(
dict(
employment_income=employment_income,
state_income_tax=state_income_tax,
mtr=mtr,
adults=adults,
children=str(children),
)
)
# Make a table of state taxes for different numbers of adults and children.
l = []
for adults in range(1, 3):
for children in range(0, 4):
l.append(make_tax(adults, children))
df = pd.concat(l)
LABELS = dict(
employment_income="Employment income",
state_income_tax="Oregon tax",
mtr="Marginal tax rate",
adults="Adults",
children="Children",
)
COLOR_MAP = {"0": GRAY, "1": LIGHT_BLUE, "2": BLUE, "3": DARK_BLUE}
fig = px.line(
df,
"employment_income",
"state_income_tax",
color="children",
animation_frame="adults",
labels=LABELS,
title="Oregon state income tax",
color_discrete_map=COLOR_MAP,
)
fig.update_layout(
xaxis_tickformat="$,",
yaxis_tickformat="$,",
plot_bgcolor="white",
xaxis_gridcolor=LIGHT_GRAY,
yaxis_gridcolor=LIGHT_GRAY,
)
fig.show()
Total marginal tax rates range from -4.1% for filers in the EITC phase-in region to +10.6% to filers in the EITC phase-out region; this exceeds the 9.9% marginal tax rate on top earners. In addition, Oregon’s tax system creates cliffs due to (a) income limits on the exemption credit, and (b) the step-down of the federal tax liability subtraction.
fig = px.line(
df,
"employment_income",
"mtr",
color="children",
animation_frame="adults",
labels=LABELS,
title="Marginal tax rate for an Oregon household",
color_discrete_map=COLOR_MAP,
)
fig.update_layout(
xaxis_tickformat="$,",
yaxis_tickformat=".1%",
yaxis_range=[-0.15, 0.15],
plot_bgcolor="white",
xaxis_gridcolor=LIGHT_GRAY,
yaxis_gridcolor=LIGHT_GRAY,
)
fig.show()